VW struggling to find a solution to its US emissions problem: Report

Last month, VW announced that it had reached an agreement with German regulators to resolve its NO2 emission problems and would be able to deploy the fix as a relatively simple update. Solving its issues on this side of the pond, however, has not been so simple, and now a source close to the company has indicated that VW, the EPA, and the California Air Resources Board (CARB) have yet to agree on a method to resolve the US problem, Reuters reports.

There are two possible explanations for why VW is having trouble in the US that it isn’t facing in Europe. One is that European regulators, despite paying lip service to the idea of NOx pollution control, have once again failed to require the company to make meaningful improvements. This isn’t as far-fetched as it might sound — once we started digging into the VW scandal last fall, it became apparent that pieces of the evidence had been compiled by various sources over the last few years. It was well known that diesel vehicles in Europe, despite advertising clean diesel technology, had more-or-less failed to improve actual emissions.

The graph below shows the widening gap between Europe’s supposed diesel emission standards and the reality of real-world testing. Required results are on the left, actual results are on the right.

Given VW’s prominence, Germany’s importance within the EU, and ongoing economic uncertainty in the worldwide economy, it’s possible that regulators chose to give VW an easy out rather than actually holding the company’s feet to the fire. Public outcry were this to be discovered, however, would likely be severe — dwarfing even the reaction to the initial scandal, which has smashed VW’s stock price and sent vehicle sales tumbling.

The second possibility is that VW simply can’t hit US emission targets without drastically overhauling its fleet, and possibly adding hardware to existing TDI cars that could compromise their design or long-term reliability. US standards on NOx emissions are considerably tighter than even the recently-introduced Euro-6 emission requirements, as shown below:

Diesel emission standards, US vs. EU.

Under US law, all VW vehicles sold since 2009 were supposed to emit ~0.05g of NOx per km, while European law allowed for nearly 0.2g per km. Particulate standards were slightly tighter under the EU, but not to a significant degree. When news of the scandal first broke, some speculated that VW had already solved its emission problems with 2015 and 2016 vehicles, limiting the scope of the problem. We now know that wasn’t the case; VW had cheated, even on 2015 vehicles, and had planned to continue using its defeat devices in 2016. That’s why the company suspended plans to sell diesel automobiles in the US until the entire situation was resolved to the EPA / CARB’s mutual satisfaction.

If these rumors are accurate, VW could face a much higher cost-per-vehicle to bring US diesels in line with EPA standards — and that’s before we factor the US Department of Justice’s lawsuit against the company. Reports have claimed that VW could face a fine between $48 billion and $90 billion, but this is a drastic inflation of what might actually be assessed. No judge would award damages that would bankrupt the auto manufacturer, and the amount would never stand on appeal, even if one did. That said, VW is almost certainly facing an extremely expensive recall and several billion dollar fine on top of that. The government will almost certainly want to ensure that the penalty is larger than the profits VW reaped from lying to US customers and misrepresenting its products.

Tagged In

What I don’t understand, @Joel Hruska, is why they simply can’t implement the “dyno-testing tune” full-time. Were none of the autos in question ever dyno tested to begin with? I am under the impression that EPA mileage and emissions were gauged on said “testing tune”.

http://www.twitter.com/jlendino Jamie Lendino

No for EPA mileage and yes for emissions; manufacturers largely self-test for EPA ratings. So putting cheat mode on full time will degrade the car with some combination of reduced performance, lower fuel economy at different speeds, decreased smoothness, and/or long term reliability. A big possibility is that the car may no longer make its EPA city/highway MPG numbers, which would be yet another problem.

Alden

Thanks, Jamie. It’ll be interesting to see how this plays out, for sure. I’m hoping to grab a TDI in question, at a significant price reduction, and put a custom tune on it anyway.

Plyphon

Man just buy a petrol if you’re going to tune it anyway.

Joshua Burstyn

Presumably you’ll still need to meet emissions testing parameters. Not sure how much you’ll be able to tune given VW’s own trouble getting the car to pass emissions tests as they stand now.

Alden

Most states are not equipped to test emissions and rely on the Feds for certification. As I understand it, even fewer states are equipped to test diesel.

Alden

Could do that. But the tuned TDI outperforms the stock petrol and gets 45mpg doing it.

Plyphon

What engine sizes are we talking about here? Are the TDI’s so cheap now that you can get a decent sized TDI for the same price as a 2.0 petrol or something?

Alden

That’s what I’m waiting to see. The final emissions fix will have an effect on the resale values of the 2.0l TDIs. If devalued enough, it might make for a great project/daily driver combo.

bob Johnson

The article said they can’t agree on a solution. They have solutions, but obviously VW doesn’t want to pay out the rear for a fix and the EPA wants a good fix. So negotiations have stalled.

ja_1410

My guess would be that the car would have to run rich which significantly fuel economy and possibly ruins catalytic converter in longer runs.

Justanotherokie

Give VW a break, it doesn’t really matter. What does matter is all the people that paid big bucks for pollution control hardware that does nothing. How much was added on to the sticker for the wasted effort?

http://www.drudgereport.com/ CT

It might matter to the domestic manufacturers that had to go with Urea and other expensive solutions – all the while VW was touting themselves as being ‘Clean’. It hindered competition and has potentially destroyed diesel as an alternative passenger car fuel in the U.S.

jayd

I’d like EPA’s scrutiny to be applied across the board (pickups, trucks, buses etc). Sure, VW earned what they get but I just don’t find their vehicles to be anywhere close as bad as some other junk (old, new or “tuned) I encounter on daily commute.
VW was indeed desperate to bet their house for minimal gains – slightly de-tuning the engine would let them meet the requirement while buyers would barely noticed 5% drop in power or mpgs. Quoted fines are insane – are they trying to recoup GM bailout on VW? What about unlimited data and other cheats US consumer has got used to by now?

powerwiz

Who cares. This only effects 11 million cars worldwide with many in other countries significantly lowering that 11 million number.

They will pay the fine, figure out a way to fix it and life will go on. You will continue to drive it and put gas in it.

Grahaman27

its not that simple. All adequately helpful solutions radically reduce fuel economy. All of the sudden that 50 mpg VW car you owned only gets 35 mpg and you want to sell back your vehicle.

Joel Hruska

Consumer Reports tested the relevant VW’s with the emissions control system fully activated and found the MPG hit was far smaller than this — only about 3-4 mpg. That’s still enough to sting, but it’s much less than the 15 mpg you describe.

Joshua Burstyn

It’s enough in my view that buyers who paid a premium for a TDI over a roughly comparable gasoline car should be peeved. Losing 3-4 mpg may net the TDI Golf (for instance) the same mileage as some ordinary gasoline cars costing a lot less. Worse yet in some markets diesel is more expensive than gasoline.

powerwiz

Thats a over exaggeration. CR has done a pretty good test on it as one of the posters has mentioned. Its far less then what your saying and in many cases you might not even notice it. All depends how one drives and even in a high MPG car you will not get 50 mpg the whole time. I drive a 370z and I get radically different MPG depending on how I drive. Anywhere from 15 if I am zipping through city traffic to about 30 cruising on the highway.

If CR’s figures are correct then in my case I would find 3-4 mpg difficult to even notice. Then again I am paying 2.10 for premium and could care less how much gas I am using. Gas is dirt cheap and its going to get cheaper as 2016 moves along.

Bert

What about the large number of vehicles that never had a urea system to start with? Those supposedly extremely expensive to retrofit. In many cases, Volkswagen will probably end up buying back the vehicles entirely because it’s cheaper. The buyers of those cars without urea systems will most likely have to find a new car entirely.

powerwiz

You are correct. If memory serves me correct Chrysler was forced to buy back a couple hundred thousand trucks and SUV’s. Not sure on the exact number but it was a lot.

No judge will bankrupt a company to comply with this crap and VW will like any company find the smartest fastest path to get out of this.

Bert

They will probably find a fairly quick path to deal with the affected vehicles, but the repercussions will likely go quite a bit further. This isn’t a cover-up operation like most other automotive scandals are. VW knowingly gave the EPA the middle finger when they started this. I can’t imagine they’ll get off very easily.

powerwiz

Being that we will have a new President pretty soon nothing more then a significant contribution can’t solve. Law suits like this unless VW plans to simply not contest the amount can drag on for a while. Expect a immediate appeal to simply lengthen the time. Then the next President can simply settle out for a far less amount, and life goes on.

VW also does not sell that many cars in the US. They never have they never will. Look up there market share percentage. Trucks and SUVs still make up the majority of profit that the automotive sector reel in.

Bert

Maybe a campaign contribution will be enough, but the EPA is pretty pissed off about this one. They want to make an example of Volkswagen for knowingly braking the laws they set. I don’t know if a campaign contribution will be enough to get them to fall in line. Time will tell.

You are right about the vehicles themselves though. I suspect those will be taken care of in a relatively quick fashion and I doubt the ruling will be designed to put them out of business.

Lonnie Veal

Seems simple…remember: the Problem was ‘Dishonest Engineering’

That’s right you shifty-eyed nerds…we’re onto you! So you can stop pretending to be innocent and clueless, hiding behind that widescreen monitor!

More Executives will be assigned to properly supervise and indoctrinate wayward engineers and coders. After all, they evidently never taught ethics in the Engineering Quad!

Shame on them! Didn’t their mothers tell them that every time an Engineer tells a Lie, a Marketing Exec goes to Heaven?

Jesus is weeping, I tell you! He Weeps!

Bob Wilson

According to Bloomberg, VW sales went from $12 B in 2009 to $28 B in 2015 when the cheat-diesels were revealed. That is roughly $14 B gain built partially on the cheat diesels. Worse, VW delayed the investigation for at least a year in 2014.

At least 500,000 USA car sales were lost because of the VW cheat. Using a conservative $20,000 per car, this was $10 B at a minimum. This is pretty close to the $14 B in VW sales gain.

VWs one year delay in 2014 tells us they were trying to continue the fraud, the cheat. Had they come clean, there would be room to negotiate but instead, another year of cheat-diesel sales. Every labor hour and expense spent after 2014 should be charged. Then the lawyers and court system that is dragging them to justice.

Bob Wilson, Huntsville, AL

powerwiz

Then the government will use that 14 billion to pay for the parasites on Obamacare, Food Stamp junkies, welfare queens. Oh I forgot also to lecture me on Islamic issues and how I am a racist.

Kevin Moore

“No judge would award damages that would bankrupt the auto manufacturer, and the amount would never stand on appeal, even if one did.” This is why we don’t live in a free market and anyone who says we do doesn’t understand much about the economy or is lying to you. I’m not saying that such a penalty is the right option, I think the country has more to gain by using VW to improve low emission and alternative fuel vehicles rather than just bankrupting them, but this is like saying no judge would sentence a criminal so harshly that they would spend the rest of their life in prison. Free market capitalism doesn’t mean pro business. When most people say they believe in capitalism they really mean they are pro business. Meaning we should make it easier for businesses even if that disadvantages others who would compete with them or cause harm to regular people.

Bob

VW has lost the trust of the consumer, they wont be bouncing back any time soon, Only brands like Audi will continue as they are very desirable

Plyphon

People don’t care for brand trust. They care about price.

Bob

what? That is the most moronic reply to date.

Brand trust is everything! you going to buy off a brand that rips you off and lies?

You might as you are a moron but 99% people care about what they purchase.

Plyphon

Christ Bob lay off the personal insults you comment section warrior.

VW’s sales went UP by a margin AFTER the emissions scandal broke. Why? Because they cut the price of the cars by a few thousand dollars. People care about price.

VW hasn’t lost any trust with that majority of consumers. They still make very attractive mid to luxury cars with good performance and an excellent safety record, at a VERY competitive price. That’s what counts.

Moron.

Reginald Peebottom

That’s not wholly true. People do care about price of course but the market is so competitive that people won’t tolerate crappy cars. And once you’ve got a reputation for a crappy product it takes years to overcome it. Witness KIA and even Hyundai’s struggle for years to overcome the stigma they caused themselves from years of very cheap but very crappy cars even though now their cars are very good by any measure.

Plyphon

In the UK Kia’s and Hyunda’s are doing great, you see them everywhere – which infuriates me as I can’t think for a reason why you’d want to own one.

Joshua Burstyn

Toyota seems to think they’re competition enough to be worried. The price for parts/labour is also very competitive and the reliability is now average or better than average. Purchase price is also a strong point for Kia/Hyundai.

From personal observations, I’d say VW is still popular with many people because they still like the brand. Not too sure about other areas of the world, but in North America brand loyalty seems strong and alive, and whether this is due to plain ignorance is hard to say . . .

Plyphon

Yeh, same in Europe. They still make great looking cars that are safe, reliable, and highly desirable. Scirocco R – come at me!

FrankenPC .

VW needs to be driven into the ground to show the rest of the corporate shills what happens when you’re caught lying.

Plyphon

So what would you have done to GM who actually, directly, through negligence killed some people?

Plyphon

And by some I mean over 120

Joshua Burstyn

They both deserve whatever they get. No need to discriminate in dissuading manufacturers from immoral and in many cases outright illegal behaviours.

Plyphon

Issue is GM didn’t get much at all. $900 million for killing over 120 people and potentially putting tens of millions more at risk. That’s pennies compared to VW’s $90billion for telling a few porky pies!

Reginald Peebottom

Thats insane. Let’s cause hundreds of thousands of people to lose their jobs because a hand full of morons cheated.

Make them pay hefty fines (and governments need the cash at the moment). Make them fix the problem. And publically shame them and hold their execs responsible. Then move on.

rbbost

In your first sentence, I think the U.S. number is 0.05g, not 0.5g (which would be more lax than the Euro standard of 0.2g).

Joel Hruska

Whoops. Thank you.

Mel Gross

What the government here should do, it to give VW 6 months to implement a solution that meets emission standards that will be in place in 6 months. If VW fails to do so, then those cars should be ordered to be taken off the road, with VW responsible for getting those car owners cars that do meet the standards.

James

How can VW find a solution when they could not solve the emissions problem in the first place?
I still like Elon’s idea about forcing VW to increase electric sales, otherwise find them to the brink of bankruptcy.

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